Partners in Financial Empowerment

Welcome to the Settlement Worker's Toolkit!

This toolkit is designed to help settlement workers provide money-related information to their newcomer clients to help them reach their financial goals.

The tool contains financial information specific to life in Canada and allows you to create information packages in PDF format that are customized to the needs and priorities of your individual clients.

When you are ready, please select a category below to begin.

Instructions:

Pick information topics and customize your information package. To see the content, click on the + sign. (Click on the minus sign to close.) To include the content in the PDF, click on the grey box. A check mark will appear.

Scroll up and click the box labelled Create PDF (on the right hand side) to create a customized PDF for your client. You can email it to them by including their email address in the box labelled "email."

For more detailed information on how to use this tool, read the Instructions and FAQs.

Manage your Money

Banking

How do I choose a bank account?

There are a few questions to ask yourself when deciding which bank and bank account is right for you.

Bank Services:

  • Where and when do you want to bank? (Location and hours)
  • Do you want a bank that's close to your work or your home?
  • How do you want to bank? (Online, in-person or on telephone)
  • Do you want to deal directly with a bank teller or would you prefer to use automated teller machines (ATMs)?
  • What kind of services will you need? (cheques, loans, credit card, investment advance)  
  • Will you mostly deposit and withdraw money? Do you plan to save money at your bank?

Bank Fees and Interest Rates:

Once you have decided on the services you need, start comparing the accounts, interest rates and fees among banks:

  • What are the fees for the services you need?
  • How much interest can you earn on your deposits?
  • Is there a minimum balance you must keep in your account?

Shop around and compare the options at different banks. This is the best way to make sure you get the bank account that fits your needs.

The Banking Selector Tool:

A good resource to help you get started is the Financial Consumer Agency of Canada. They have an online tool that can help you figure out which account is best for you. You can find it at http://www.fcac-acfc.gc.ca/eng/resources/toolcalculator/banking

What are some other ways to access money?

CAUTION!

Alternative financial services are outside of the traditional, regulated banking system. They do not take deposits like banks or credit unions. They offer these services; but at a much higher cost.


Cheque-Cashing:

  • Cash cheques instantly with no bank account required
  • Chard a percentage of the cheque, plus a service fee

Example: On a $1000 cheque, they may charge a 3% fee ($30), plus a $3 service fee, for a total charge of $33.

 

Payday Loans:

  • Short-term loan of two to four weeks against your next paycheque
  • Can usually borrow up to 50% of your next paycheque
  • To qualify, you must:
    • Show proof of income, such as a month or two of pay stubs
    • Show proof of identity
    • Give the lender a post-dated cheque or permission to take the money from your bank account
  • Charge high service fees and interest charges; average fee for 2-week, $300 loan is $60, or 520% annual interest rate
  • Charges go up if repayment is late
  • May be fees for repaying loan early

Tip: Review loan agreement and understand the terms before you sign.  Keep a copy of the agreement for yourself.
 

Rapid-Refund Tax Services or Instant Tax Refund:

  • Services you can use to file your income tax return
  • You get the refund amount right away, less the fees and charges. The government sends your refund to the tax service, and that pays off your loan
  • If the government denies your tax refund, or if it is smaller than expected, you still have to pay back the loan to the tax service
  • Claim to provide "instant refunds", but these are not tax refunds; they are expensive loans
  • High fees for these services, including preparation fees, electronic filing fees, cheque cashing fees, and loan charges

 

Pawn Shops:

  • Loan cash in exchange for valuable objects, such as jewellery and electronics
  • Objects are called "collateral" for loan
  • If you repay the loan, you get the object back. If you don't, the pawn shop keeps the item and sells it to someone else
  • Need to show identification
  • Pawn shop may run a check to see if the item has been reported stolen
  • Loans provided are a fraction of the true value of the object
  • Pawn shops often charge high interest and fees

 

Rent-to-Own Programs:

  • Allow purchase of household items (such as electronics, appliances, or furniture) by paying a weekly or monthly fee
  • May be a charge for setting up a rental plan, a damage deposit, an insurance fee, a buy-out fee, and a cancellation fee
  • Charge high interest rates; may be 28 - 40% a year. By the time item is paid for,  the total cost may be two to six times higher than the original cost.
  • If you miss a payment, you may have to return the item or it may be taken away. When this happens, you may lose any payments you made so far.

How do I open a bank account?

STEP 1: Decide which services you want. The Bank Account Selector Tool can help you decide.

STEP 2: Choose a bank. Pick a bank that has a location and hours that are good for you, with the services you want.

STEP 3: Make an appointment to go to the bank in person.

STEP 4: Review the account options. Make sure to ask them about services, interest rates, and service fees.

STEP 5: Complete the papers needed to open an account. Make sure that you bring the right identification (I.D.)

What kind of I.D. do I need?

You have three options:

  • You can show 2 pieces of I.D. from List A 

                                   or

  • You can show 1 piece of I.D. from List A and 1 piece of I.D. from List B

                                   or

  • You can show 1 piece of I.D. from List A and have someone the bank knows confirm your identity

 

LIST A LIST B
  • Canadian Driver's License
  • Employee I.D. Card
  • Canadian Passport
  • Debit Card or Bank Card with your name and signature
  • Canadian Birth Certificate
  • Canadian Credit Card with your name and signature
  • Social Insurance Number (SIN) Card
  • Current Foreign Passport
  • Old Age Security Card
  • Canadian National Institute for the Blind (CNIB) Client Card with your photo and signature
  • Certificate of Indian Status
 
  • Provincial or Territorial Health Card (except in Manitoba, Ontario or P.E.I.)
 
  • Certificate of Canadian Citizenship or Certificate of Naturalization
 
  • Permanent Resident Card or Citizenship and Immigration Canada Form IMM 1000, IMM 1442, IMM 5292
 



 

What are my rights?

You have the right to open a bank account, even if:

  • You don't have a job
  • You don't have money to put in the account right away
  • You have been bankrupt

 

When can the bank refuse to give me an account?

A bank can legally refuse to open an account for you if:

  • You cannot show the right identification
  • The bank thinks you will use the account to break the law
  • You committed a crime against a bank in the past 7 years
  • The bank thinks you gave false information when applying for the account
  • The bank thinks that opening the account may bring harm to its customers or staff
  • You do not agree to let the bank do a check on you about the things listed above

 

What can I do if I think the bank was wrong to refuse me an account?

  • If the bank refuses to give you an account, the law says they must give you a letter stating this fact
  • The letter informs you of your right to contact the Financial Consumer Agency of Canada (FCAC)
  •  You can call the FCAC toll free for help at 1-866-461-3222

 

What if I have a complaint about my bank?

If you have a complaint about how the bank has handled transactions on your account, you can take these steps to resolve it:

  1. Speak to a customer service representative at your branch
  2. Write a letter or email to the branch or area manager
  3. Write a letter or email to the bank's internal Ombudsman
  4. Call the Ombudsman for Banking Services and Investments (OBSI) toll free at 1-888-451-4519
  5. RBC & TD Canada Trust customers should contact ADR Chambers Banking Ombudsman office at 1-800-941-3655 

What is the difference between banks and credit unions?

Banks and credit unions are places where you can safely deposit money, cash cheques, pay bills, apply for a loan or credit card, and use a variety of saving and investing tools. This chart explains the differences between banks and credit unions: 

  BANKS                     CREDIT UNIONS
ORGANIZATION
  • For-profit corporation
  • Not-for-profit organization
REGULATION
  • Federally regulated by The Bank Act
  • Provincially regulated; regulation varies by province
OWNERSHIP
  • Owned by shareholders
  • Shares sold on the stock market
  • Both Canadian and foreign- owned banks operating in Canada
  • Owned by members

 

MEMBERSHIP
  • No membership requirement to open an account
  • Must buy a share and become a member to open an account
  • Membership allows you to vote
  • Can help govern credit union through participation in Board of Directors or committees
  • Common bond of membership varies. It could be: religion, ethnicity, social interest, occupation, employment, or geographic area
INSURANCE
  • Deposit insurance varies by province
  • Ranges from $100,000 to unlimited
  • Covers only deposit accounts, not investment products


 

Credit Union Deposit Insurance by Province:

PROVINCE DEPOSIT INSURANCE INSURER
  • British Columbia
  • 100% - unlimited
  • BC Credit Union Deposit Insurance Corporation
  • Alberta
  • 100% - unlimited
  • Alberta Credit Union Deposit Guarantee Corporation
  • Saskatchewan
  • 100% - unlimited
  • Saskatchewan Credit Union Deposit Guarantee Corporation
  • Manitoba
  • 100% - unlimited
  • Manitoba Credit Union Deposit Guarantee Corporation
  • Ontario
  • Up to $100,000 per person in unregistered deposits and 100% for registered plans
  • Deposit Insurance Corporation of Ontario
  • Quebec
  • Up to $100,000 per person
  • Autorité des marchés financiers
  • Nova Scotia
  • Up to $250,000 per person and an additional $250,000 in registered plans
  • Nova Scotia Credit Union Deposit Insurance Corporation
  • New Brunswick
  • Up to $250, 000 per person and an additional $250,000 in registered plans
  • New Brunswick Credit Union Deposit Insurance Corporation
  • Newfoundland and Labrador
  • Up to $250,000 per person and an additional $250,000 in registered plans
  • Newfoundland and Labrador Credit Union Deposit Guarantee Corporation
  • Prince Edward Island
  • Up to $125,000 per person and an additional $125,000 in registered plans
  • PEI Credit Union Deposit Insurance Corporation

Useful Websites:


What do I need to know about banking in Canada?

 

In Canada, most people keep their money in accounts at banks or credit unions.  There are two basic types of accounts:

  1. Savings Account
  2. Chequing Account

For either kind of account, your bank or credit union will offer these services:

  • Deposit and withdraw money

  • Move money between accounts (transfer)

  • Check your balance

  • Pay bills

  • Direct deposit of government cheques or paycheques

  • A debit card for ATM/ABM access and retail Interac purchases

  • Preauthorized or automatic bill payments

  • Preauthorized or automatic transfers to savings (Automatic Savings Program)

  • Telephone and internet banking

     

Insurance:

  • Bank and credit union deposits are insured; if the bank or credit union goes bankrupt, you are guaranteed a portion of your money back
  • Credit union insurance varies by province; it ranges from $100,000 to unlimited

Savings Accounts:

This type of bank account can be used to set money aside for short to medium-term savings. 

Interest:

  • The bank pays you interest on your deposits. The amount you earn depends on the bank and the type of savings account you choose.

  • Sometimes, banks pay higher interest when there is a larger amount of money in the account.  

  • Some banks will pay more interest if you keep a certain amount of money, called a minimum balance, in your account.

  • The interest is low compared to other types of investments.

Savings Account Fees:

  • Savings accounts can come with a limited number of free transactions. After that, there are fees for using your debit card, making a withdrawal, and paying bills.  

  • You may be charged fees for receiving a paper bank account statement.

  • There are fees for using a bank machine if it does not belong to your own bank. 

  • Service fees vary between banks and account types. Make sure to choose the best option for you so you don't pay for services you don't need.

Chequing Accounts:

This type of bank account is used for everyday banking. For a fee, the bank will supply you with cheques that you can use to pay bills.

Interest:

  • Most chequing accounts do not pay interest on deposits

Chequing Account Fees:

  • Chequing accounts may be free or low cost for certain groups (youth, students, seniors or people with disabilities). 

  • Fees may be packaged under a set rate for a certain number of transactions per month. There are extra charges when you go over.

  • You may have the option of a flat rate fee for unlimited transactions.

  • Some chequing accounts are free if you keep a minimum balance in your account.

  • If you write a cheque and there is not enough money in your bank account to cover it, you will be charged a Not Sufficient Funds (NSF) fee of around $40 - $50.  

Other Banking Services:

Banks and credit unions can provide other convenient services including:

  • Certified cheques
  • Credit cards
  • Free cashing of federal government cheques
  • Money orders
  • Mortgages
  • Personal and student loans
  • Wiring money
  • e-Transfers

 

Budgeting

How do I set financial goals?

Keep your financial goals SMART:

  • SPECIFIC: Specific goals are easier to manage

  • MEASURABLE: If you can measure your goal, you will know when you are getting close to it

  • ACHIEVABLE:  Set a goal that is within your power and ability to achieve

  • REALISTIC: Make sure your goal is realistic for you and your life

  • TIME-BOUND: Set a clear deadline to achieve your goal. Some goals are short-term (this month); some are medium-term (this year); some are long-term (beyond a year).

What are the steps to goal setting?

  • Step 1:

     Define your SMART goal. Include any costs associated with achieving that goal.
  • Step 2:

     Outline all the steps towards your goal.
  • Step 3:

     Look at the challenges you might face.  Think of strategies and resources you have for dealing with them.  
  • Step 4:

     Set deadlines. You may want to set deadlines for each step as well. 

What is a budget?

A budget is a way to keep track of your money.  It is a tool that can help you organize your finances and plan for the future.  Most budgets are monthly.  They include:

  • Income (how much money comes in)
  • Expenses (how much money goes out) 

Expenses can be fixed (the same every month) or variable (changes every month).

What are some ways to budget?

Worksheet Budget:

  • Written budget
  • Can be written by hand or typed on a computer spreadsheet
  • Flexible; can update as things change in your life

Online Budget:

  • Many websites offer pre-made budget worksheets
  • Budget categories may be preset

Envelope or Jar Budget:

  • Can put money in labeled jars or envelopes to put towards expenses and savings
  • When the money is gone, you stop spending

Allowance:

  • Once you pay your expenses, you can give yourself a weekly allowance for all variable spending
  • When your weekly allowance is gone, you stop spending

What financial documents should I keep?


These are some important documents you should keep for your financial records:

Tip: Shred or destroy important documents before you throw them away. 

Document:    
Keep For:
  • Birth certificates and other I.D.   
  • Life
  • Social Insurance Card   
  • Life
  • Monthly bills with confirmation of payment   
  • 1 year
  • Receipts for major purchases
  • Until past return date or warranty
  • Warranties and guarantees for items you buy
  • Until past warranty
  • Medical receipts    
  • 1 year (may be used for taxes)
  • Bankbooks and statements   
  • 1 year
  • Unused cheques or copies of cancelled cheques    
  • 1 year or 6 years if used for taxes
  • Investment papers and statements    
  • As long as you own investment
  • Credit card statements   
  • 1 year or 7 if used for taxes
  • Leases (lease to buy), loan and mortgage papers    
  • Until paid off, keep receipt of final payment
  • Tax returns, notices of assessment, tax-related receipts    
  • 6 years
  • Insurance papers   
  • Until insurancy policy expires
  • Final will and testament   
  • Life

 

Where can I find resources for managing money?

Financial Consumer Agency of Canada (FCAC) http://www.fcac-afc.gc.ca


Your Money – Canadian Bankers Association http://www.yourmoney.cba.ca


Get Smarter About Money – Investors Education Fund
http://www.getsmarteraboutmoney.ca

How do I make a budget?

Step 1: Get Ready

  • Gather all the financial documents you need, including:
    • pay stubs

    • stubs from government cheques or direct deposit notices

    • receipts

    • bills

    • bank and credit card statements

    • loan documents

Step 2: Track Your Income

  • List all your sources of income per month
  • Add them up; this is your Total Monthly Income

Step 3: Track Your Expenses

  • List all your monthly expenses 
  • Write down which ones are fixed (the same every month) and which are variable (change every month)
  • Include seasonal expenses (yearly insurance costs, back-to-school clothes, holiday gift buying): divide the total yearly cost by 12 to get an average monthly amount; include that as a fixed expense

Step 4: Do the Math

  • Add up your Total Monthly Expenses
  • Subtract this amount from your Total Monthly Income
  • Do you have money left over? Or are you spending more than you earn? 

Step 5: Revise Your Budget

  • If your expenses are greater than your income, make changes to your budget, if possible
  • Think honestly and realistically
  • Where can you can cut back on expenses? Where can you increase your income? Should you change your savings goals?

What are some budgeting tips?

  • Track your spending so you know what your expenses are
  • Include debt and savings in your budget
  • Pay yourself first: treat your savings as a fixed expense.  You can use your bank to automatically transfer money to a savings account
  • Keep it simple: simple budgets are easier to stick to
  • Be realistic: make sure your budget is honest and accurate
  • Write down your goals: remembering your goals can help you stick to your budget
  • Stay organized: keep your financial records in a binder
  • Review your budget regularly: make changes to your budget as your income, expenses and goals change

Credit and Debt

What are credit ratings and scores?

Credit Rating:

  • Rating given to each credit account by credit bureau

  • Appears on your credit report
  • Affects how people view your credit worthiness
  • Rating contains number and letter
  • Letter refers to type of credit:
    • R: Revolving credit; limit to which you can spend;  credit cards, overdraft protection, lines of credit
    • I: Instalment credit; receive an amount of money all at once, pay back in regular instalments; car loan, student loan, mortgage
    • O: Open credit; monthly bill you must pay in full; phone bill or utility bill
  • Number on a scale between 0 and 9; 1 is the best credit rating

 

Credit Rating Chart:

Rating Description
R0
  • Too new to rate: approved but not used
R1
  • Pays within 30 days of billing, or pays as agreed
R2
  • Pays in more than 30 days but less than 60 or one payment past due
R3
  • Pays in more than 60 days but less than 90 or two payments past due
R4
  • Pays in more than 90 days but less than 120 or three or more payments past due
R5
  • Account is at least 120 days past due but is not yet rated R9
R6
  • No rating exists (There is no R6)
R7
  • Paid through a consolidation order, consumer proposal or credit counselling debt management program
R8
  • Repossession of security
R9
  • Bad debt or placed for collection or bankruptcy

 

Credit Score:

  • Number given by credit bureau to rate your overall credit worthiness
  • Between 300 and 900; 900 is best
  • 5 main factors used to arrive at your credit score (see below)
  • Factors carry different weight in determining your score

 

  • Payment History (35%): History of borrowing and repaying
  • Amounts Owed (30%): Amount of debt you carry compared to amount of credit available to you
  • Length of Credit History (15%): How long you have been using credit
  • New Credit and Inquiries (10%): Inquiry every time you apply for credit; too many inquiries can lower score
  • Types of Credit (10%): Different types of credit can improve score; shows you can manage different forms of credit

 

What other factors affect my credit?

  • Accounts given to collections can damage credit
  • Bankruptcy can severely damage credit

 

What factors do not affect my credit?

  • Inquiries you make into your own credit report 
  • Mortgage information may appear in your credit report, but not used to calculate your credit score

 

 

What is credit?

  • Credit is a loan
  • Lender extends credit to a borrower; borrower can use money now and promise to pay back later
  • Borrower pays interest to lender for use of the loan
  • Here are some types of credit:

 

 

Type of Credit Lender Uses Conditions
Credit Card Financial Institution
  • Make purchases
  • Pay bills
  • Make reservations
  • Rent products
  • Buy online
  • Credit limit amount
  • Minimum payment required
  • Interest rates vary
  • May be extra fees and benefits (annual fee, travel rewards)
Department Store Card Retail Store
  • To make purchases at the store of issue
  • Credit limit amount
  • Minimum payment required
  • Higher interest charges than a regular credit card 
Overdraft Protection Financial Institution
  • Connected to bank account
  • Protects against small cash shortages and NSF fees
  • Fees for use
  • Interest charges
Line of Credit Financial Institution
  • Make purchases
  • Credit limit amount
  • Minimum payment required
  • Lower interest rates
Pay Day Loan Private Business
  • Short term cash needs
  • Amount based on paycheque
  • Term less than 1 month
  • High interest and fees
By-Now-Pay-Later Loan Retail Store
  • Buy high cost household items
  • Pay in full by due date
  • Can pay in lump sum or instalments
  • May be set up fees
  • If loan is not paid in full by due date, high interest fees that go back to date of purchase apply
Rent-to-Own Retail Store
  • Buy high cost household items
  • Pay in instalments
  • Terms and conditions vary widely
  • Fees can double cost of item 
Consumer Loan Financial Institution
  • Make large purchases (renovations, car, computer)
  • Receive lump sum
  • Set interest rate and repayment schedule
  • Interest rates vary
Mortgage Financial Institution
  • Buy house or other property
  • Requires down payment of 5-20%
  • Receive a lump sum
  • Set repayment schedule over many years (20-35)
  • Terms of agreement set for 1-5 years
  • Interest rates can be fixed or variable
Student Loan Government
  • Pay for education 
  • Low interest rates
  • Repayment begins after student leaves school
  • Amount depends on financial need

 

How do I deal with creditors and collection agencies?

Creditors:

Here are some ways to deal with creditors if you have unpaid debt:

Step 1: Create a Debt Repayment Plan

  • Be realistic

  • Offer to make a payment you can afford

  • Propose a realistic timeframe for repayment; longest timeframes are 3 to 5 years

  • Don't make promises you can't keep

  • Be specific; make sure the plan is clear

  • Tell creditor when you will contact them in the future
  • Follow through

 

Step 2: Contact Your Creditors

  • Contact someone in charge:

    • Bank or credit union branch manager, collections supervisor, or loans officer
    • Finance company branch manager
    • Retail  or department store collection supervisor or credit manager
  • Explain:
    • Reason for contacting
    • Current debt
    • Reason why you cannot make payment
    • Proposed debt repayment plan
  • If the person you talk with is not helpful, speak to a supervisor
    • Try to deal with the same person
    • Keep a record of the conversation, including:
      • Company name
      • Phone number
      • Name of the person you spoke to
      • Date and time
      • Description of what was said and any agreements
  • Ask for any agreements to be put in writing

 

Collection Agencies:

  • If your debt remains unpaid, your creditor may send it to a collections department or agency
  • Collections agencies may contact you repreatedly about repaying your debt
  • Both you and collection agencies have rights

You have the right to:

  • Be told in writing that your account has been turned over to collections

  • Confidentiality: Collection agency cannot discuss your debt with anyone other than your creditor and co-signer on loan, unless you give permission

  • Ask to be contacted in writing only

  • Ask for a statement of account every 6 months that shows the amounts you have paid and the balance you owe

A collection agency has the right to:

  • Call you at home or at work

  • Call anytime after 7 a.m. and before 9 p.m., except on holidays

  • Discuss details of your debt with you , your creditor and co-signer on loan

  • Contact your friends, employer, relatives, or neighbours to get your telephone number and address only

  • Contact a person if you have given permission

A collection agency cannot:

  • Try to collect debt without writing to you first

  • Use threats or language to frighten and intimidate you

  • Give you false or misleading information

  • Add any costs to the debt you owe

  • Contact you on holidays, unless you ask

  • Contact you before 7 a.m. or after 9 p.m., unless you ask 

  • Contact you on Sundays before 1 pm or after 5 pm, unless you ask 

  • Contact your friends, employer, relatives or neighbours for any information about you other than your telephone number or address

  • Suggest that any of these people mentioned above pay your debt

  • Call your cell phone, unless you ask 

  • Pretend to be a lawyer or legal authority

  • Take you to court without permission from your creditor

  • Involve police or send you to jail

  • Take your property

How can I pay off my debt?

Step 1: Stop Using Credit

  • Avoid getting into more debt
  • Put credit cards away, don't use other forms of credit
  • Use only money you have

Step 2: Collect Your Debt Information

  • Gather all debt and account information
  • Write down:
    • Total debt amount

    • Minimum monthly payment

    • Interest rate

    • Term for repayment

Step 3: Rework Your Budget

  • Look at your budget
  • Make sure debt is included in your budget
  • Consider ways to increase income or decrease expenses

 

Step 4: Negotiate and Consolidate Debt

  • Speak with creditors directly to negotiate a lower interest rate or minimum payments
  • Combine all debts into one loan with lower interest rate

Step 5: Make a Debt Repayment Plan

  • Pay off debt with highest interest rate
  • Pay minimum payments on all other debts
  • When first balance is paid off, add that payment amount to the next highest interest debt
  • Continue this way until all debts are paid

Step 6: Stick to Your Plan

  • Keep a calendar with all payment due dates
  • Set up automatic payments through your financial institution; but make sure there's enough money in your account
  • Revise budget as you pay off debt

What if I can't manage my debt on my own?

  • There are services  and options that can help you manage debt: credit counselling, consumer proposal, or bankruptcy
  • These options have long-term effects on your credit rating
  • You should avoid these options if you can repay your debt using other strategies

Step 7: Credit Counselling and Debt Repayment Programs

  • Meet with a credit counsellor from non profit credit counselling organization
  • May recommend a Debt Repayment Program
  • They negotiate with your creditors
  • You make one payment each month to credit counselling organization; payment divided among your creditor
  • Will effect your credit rating

Step 8: Consumer Proposal

  • Can work with a bankruptcy trustee if what you owe is less than $250,000
  • They will help you to put together an offer to your creditors
  • Offer reduces your balance owing and allows you to pay them off within five years or less
  • Each creditor has one vote; they can decide whether to accept or reject your proposal
  • Court must approve
  • Protects you from further legal action 
  • Requires you pay a fee that is included in your instalment payments
  • Must attend credit counselling
  • Will effect your credit history; stays on your record for three years from the date of last payment

Step 9: Bankruptcy

  • Legal process where you declare yourself unable to pay back your debts, or ‘insolvent'
  • Must work with a licensed bankruptcy trustee
  • Trustee may force you to sell assets
  • Money is used to pay back your creditors
  • Fee to claim bankruptcy that is paid in instalments over the process
  • Takes one year or more to complete the process of bankruptcy
  • Protects you from further legal action
  • Must attend credit counselling 
  • Severely effects  credit history:
    • First bankruptcy stays on your record for 6-7 years (depends on the credit bureau)  
    • Second bankruptcy stays on your record for 14 years
  • Bankruptcy on record can prevent you from getting credit or loans


How do I choose a credit card?

 

Step 1: Know Your Wants and Needs

  • What will you be using your credit card for? 
  • Will you use it for large purchases, or everyday purchases? 

 

Step 2: Do Your Research

  • What services and features do you want?
  • What are the interest rates?
  • Do you want no annual fees?
  • Do you want rewards programs, such as frequent flyer points?
  • Choose the card that meets your needs for the lowest cost

 

Step 3: Shop Around

  • Compare cards offered through different financial institutions
  • Cost for features may vary between cards, such as annual fees and interest rates

 

Step 4: Read the Fine Print

  • Read all contracts and agreements carefully before signing 
  • Check for hidden costs
  • Ask questions if there is something you do not understand
     

How much does it cost to use credit?

  • Using credit costs money when you are charged interest
  • Add any interest or fees to the cost of using credit to figure out the total cost of an item
  • The chart below compares the cost of a $1000 purchase using different types of credit versus cash

 

Comparing the Cost of Credit:

Payment Method Cost of item Sales Tax at 12% Interest and Fees Total cost of item
Cash $1000 $120 $0 $1120.00
Buy Now, Pay in 1 Year: pay full balance on time (no interest) $1000 $120 $50 set up fee $1170.00
Buy Now, Pay in 1 Year: Pay full balance one week  late (28% interest  from date of purchase) $1000 $120 $50 set up fee
$273.09 interest
$1543.09
Buy Now, Pay in 1 Year: Make $100/month payments after due date $1000 $120 $50 set up fee
$765.52
$1935.52
Credit Card: Pay full balance by due date (no interest) $1000 $120 $0 $1120.00
Credit Card: Pay minimum payment only at 20% interest $1000 $120 $3083.97 interest over
26 years 4 months
$4083.97
Rent-to-Own: Weekly rental fee and buy out at end of contract $1000 $3.60/week $30.00 /week rental fee plus tax
$100 buy out at end of contract
$1747.20
 

 

How do I calculate the cost of credit?

  • Below are two examples of how to calculate interest on credit

 

Example 1: Calculating Interest on a Loan

  • This is a $1000 loan at 12% interest, to be paid over a two year period.

  • Equal monthly instalment payments would be $47.07 

  • Each month, as the balance goes down, you pay less interest and therefore more toward the principal

Month Payment To interest To principal Balance
1st month $47.09 $10.00 $37.09 $962.91
2nd month $47.09 $9.63 $37.46 $925.46
3rd month $47.09 $9.25 $37.84 $887.62

 

  • The full payment schedule would include 24 payments. The total interest cost would be $130.16

 

Example 2: Calculating Interest on a Credit Card

  • The interest rate is 20% annually

  • The balance owing on this card is $1000

  • Monthly interest charges are the balance, multiplied by 20%, and divided by 12 months

$1000 x .2/12 = $16.67 interest per month

  • If you pay the 2% minimum payment of $20, you will only be paying $3.33 toward the $1000 balance. The rest will go to pay the interest.

$1000 + $16.67- $20 = $996.67

  • Here is what happens if you make only the minimum payment for three months:
Month Payment To Interest To Principal Balance
1st month $20.00 $16.67 $3.33 $996.67
2nd month $19.93 $16.61 $3.32 $993.35
3rd month $19.87 $16.55 $3.32 $990.03

 

  • If you only pay the minimum payment of 2% toward your debt each month, it will take you more than 26 years to pay off the debt, and will cost over $3000 in interest

 

What is a credit bureau?

  • Private companies that collect information about how we use credit from lenders and financial institutions
  • Regulated by the province, but are not government organizations
  • 2 credit bureaus in Canada:
  1. Equifax
  2. Transunion

What do credit bureaus do with the information they collect?

  • Produce personal credit reports
  • Provide credit reports to lenders for a fee
  • Lenders pay to learn about your credit history, or your history of repaying debt
  • Use information to predict how you will manage credit in the future

What are my rights around my credit report?

  • Can get a copy of your credit report for free once a year by mail or for a fee anytime online

  • No one can see your credit report without your permission
  • Credit bureaus can only provide a copy of your report if you:
    • Apply for credit
    • Apply to rent an apartment
    • Apply for a job
    • Apply for insurance
    • Owe money on a debt
  • Credit reports are not international; your credit history does not follow you to a new country

Why should I get a copy of my credit report?

  • May be mistakes on your report that effect your credit rating

  • You are responsible for correcting mistakes
  • Can check if you've been a victim of identity or financial fraud
  • Must check both Equifax and Transunion; lenders may only report to one, credit bureaus do not share information

 

How do I manage credit?

Here are some tips to managing and improving your credit:

  • Use credit; cannot build credit worthiness without using credit

  • Only use as much credit as you can afford to pay

  • Shop around for lowest interest rate

  • Understand your agreement; know your payment deadlines and penalties for late payments
  • Read your credit card statements; make sure there are no errors
  • Pay full balance owed if possible

  • Make minimum payment if you can't pay full balance

  • Pay debt off as fast as you can to avoid interest charges

  • Pay bills on time; mark payment dates on a calendar to keep track

  • Contact creditors if you can't pay on time

  • Use pre-authorized payments if possible; automatic payments that go towards loans

  • Do not "max out" or use all available credit

  • Do not apply for credit too often

  • Calculate total cost of paying with credit; how much will it cost with interest?

What is a credit report?

  • Produced by credit bureaus
  • Contains information about your use and repayment of credit, credit history, credit rating, and credit score
  • Lenders look at report when deciding to give credit

 

Example: Credit bureau is like a school, credit report is your report card, credit rating is your grades in each subject, credit score is your overall grade point average


 

Who can get access to my credit report?

Lenders: 

  • When you apply for credit,  lender will require access to your credit report for as long as you have an account with them
  • Can use information in your report to decide:
    • Whether to give you credit
    • Your credit limit
    • Amount of a loan
    • Interest rate


Landlords:

  • May ask for access to your credit report on rental application
  • Use information to see if you are likely to pay rent

 

Insurance:

  • May provide better insurance rates to people with good credit

 

Employers:

  • Some employers may ask to see credit report; for example, government departments or finance companies

 

How do I read a credit report?

Credit reports contain the following sections:

Personal information:

  • Name, address, previous addresses, birth date, social insurance number (SIN),  current and past employers

 

Inquiries:

  • People or companies who have asked to see your credit report
  • Too many inquiries may have a bad effect on your credit score
  • Own requests to see your credit report do not affect your score

 

Account Information:

  • Information about credit accounts; loans, credit cards, department store cards, lines of credit, and consumer loans
  • Account information usually includes:
    • Creditor
    • Account number
    • Credit limit
    • Balance owed
    • Credit rating on account 

 

Banking Information:

  • Information about bank accounts  
  • Will include information of Not Sufficient Funds (NSF), or bounced cheques

 

Public Information:

  • Information about accounts that have gone to collections
  • Information about bankruptcies
  • Judgements made against you; if a creditor has taken you to court

 

Consumer Statement:

  • Can add personal statement to explain information on your report
  • For example, if you received a poor rating on one of your accounts due to job loss or illness

 

What are some common mistakes on credit reports?

  • Incorrect personal information: out-of-date contact information, mispelled names, wrong address
  • Incorrect account information: Same account appears twice, accounts that are not yours, wrong account details

  • Uninvited inquiries: Inquiries from people or companies you have not given permission to

  • Expired information: there are limits to how long information can stay on your report; see charts below for how long each credit bureau keeps information on your report in each province

How do I correct mistakes on my credit report?

Step 1:

  • Collect documents that prove mistake was made
  • For example, receipts, records of payment, etc.

Step 2:

  • Make a copy of your documents

Step 3:

  • Call the credit bureau
  • Explain the error
  • Ask what they need from you to correct the error

Step 4:

  • Send credit bureau a letter or fill out their dispute form
  • Include all information needed to correct the error
  • May take up to 30 days

Step 5:

  • Credit bureau will contact the creditor or financial institution to confirm that error was made
  • If they agree, credit bureau has 30 days to correct the error on your report, or 90 days in Alberta
  • If they disagree, write a statement explaining your story; credit bureau will add this to your report

Step 6:

  • Contact the financial institution to make a complaint
  • All financial institutions in Canada must have a process for resolving complaints from customers by law

Savings

What are some options for saving money? (Detailed)

Here are some options for saving and investing your money:

High Interest Savings Account

  • Type of deposit account
  • Bank pays you variable interest rate; rate changes with the prime rate set by the bank
  • Interest rate on high interest savings account can be 100 times higher than basic savings account
  • May be fees for withdrawing money
  • Minimum deposit may be required 
  • Covered by deposit insurance
  • Best for short to medium-term saving

Guaranteed Investment Certificate (GIC)

  • Money is ‘locked in' for a set term
  • Term can range from 30 days to five years
  • Longer terms often come with higher interest rates
  • Interest rate may be fixed or variable, but guaranteed rate for length of term is common
  • Money can be withdrawn when it "matures" at end of term
  • Plan GIC so that it matures before you need the money
  • Minimum deposit of $100 - $500 required
  • Covered by deposit insurance
  • Best for medium to long-term saving

Bond

  • Loan to a government or a corporation; they pay you interest for the loan over a set term
  • When the term is over, you get your money back 
  • The safer the bond, the lower the rate of return
  • Government bonds in Canada are very safe
  • Can buy Canada Savings Bonds from a financial institution in the fall, or can buy through payroll deduction in some workplaces
  • Corporate bonds hold some risk; need to research and get advice from a financial professional before investing
  • Minimum investment is required
  • Best for medium to long-term saving

Stock

  • Shares in a company that is publicly traded on the stock market
  • Value of shares goes up and down, depending on health of the company, stock market and economy
  • Make money from stocks in two ways:
  1. Selling shares for more than you paid; money you make is called capital gain

  2. Receive a portion of company's profits; called a dividend

  • Can be very risky, may lose all of your investment
  • Greater the risk, the higher the potential profit
  • Fee paid to broker to buy and sell shares
  • Not covered by deposit insurance
  • Best for short, medium, or long term investments

Mutual Fund

  • Money goes into "pooled" fund, along with other investors 
  • Fund manager put money into range of things, such as stocks and bonds
  • Different levels of risk and rates of return
  • Can choose what fund you want to invest in depending on rate of return, risk level, and fees
  • Can only buy through a licensed dealer
  • Fees to buy reduce the amount of your return
  • Not covered by deposit insurance
  • Best used for long term investments

Registered Retirement Savings Plan (RRSP)

  • Way to save for retirement and save on taxes
  • Can invest money in RRSP as you choose; savings accounts, GICs, stocks, etc.
  • Can open RRSP at bank, credit union, or investment management company
  • Need a Social Insurance Number (SIN) and must file a tax return
  • Limit to how much you can contribute to your RRSP each year; depends on your income
  • If you do not invest to limit, can carry over to future years
  • Notice of Assessment from filing taxes will show contribution room available
  • Money put in RRSP and interest earned is not taxed until withdrawn; RRSP contribution lowers your taxes
  • Must pay tax on money withdrawn from RRSP
  • Must begin withdrawals at age 71; government take 20% of money if withdrawn before 71 unless used to buy a home or go to school:

Home Buyers Plan

  • Can use up to $25,000 from RRSP as a down payment on home purchase
  • Must put money back into RRSP at a certain rate each year
  • Must replace all of it within 15 years

Lifelong Learning Plan

  • Can use up to $10,000 a year and up to $20,000 from RRSP to pay for your or spouse's education

  • Must put money back into RRSP at a certain rate each year

  • Must replace all of it within 10 years

  • RRSP add to retirement savings from Canada or Quebec Pension Plan and Old Age Security

Tip: Not as useful if you are living on low income or collecting social assistance

Registered Education Savings Plan (RESP)

 
  • Way to save for child's or grandchild's education after high school
  • Can invest money in RESP as you choose; savings accounts, GICs, stocks, etc.
  • Can open RESP at bank, credit union, life insurance company, investment company, or scholarship trust company; scholarship trust companies offer fewer investment options and may charge fees
  • Investor is called subscriber and child or grandchild is beneficiary
  • Beneficiary must be Canadian citizen or permanent resident, must have a Social Insurance Number (SIN)
  • Money in RESP grows tax free until withdrawn
  • Money is taxed when withdrawn at student tax rate; little or no tax because income is low while in school
  • Government adds money to RESP saved:

    The Canada Education Savings Grant: 

    • Government matches contributions
    • Matched amount depends on family income; can be from 20% to 40% up to yearly limit of $500
    • Total amount of grants available $7200
    • Grants end when child turns 17

    The Canada Learning Bond:  

    • Government benefit for low-income families
    • Can apply for $500 to open RESP
    • Do not need to deposit own money
    • Child must be born January 1, 2004 or later and must receive National Child Benefit Supplement
    • Government contributes $100 to RESP each year child receives National Child Benefit Supplement
    • Total amount of bond available is $1500
    • Bond ends when child turns 17
  • Must use all funds in RESP or close the plan within 35 years of opening

  • If you do not use funds for education, you can keep the contributions, but government will tax the interest earned when money is withdrawn; must return any grant or bond amounts

Tip: Be careful signing contracts that require monthly payments into an RESP

Tax-Free Savings Account (TFSA)

  • Way to save money without having paying tax on interest earned from investment
  • Can invest money in TFSA as you choose; savings accounts, GICs, stocks, etc.
  • Can open a TFSA at bank if you are 18 or older, a Canadian resident, and have a Social Insurance Number
  • Limit to how much you can add to account each year; called contribution room
  • Contribution room increases by $5500 each year
  • Unused contribution room carries forward to future years
  • Withdrawals do not affect the amount of money low income earners receive from federal government benefit programs, including Canada Child Tax Benefit and Guaranteed Income Supplement
  • Best for medium to long term saving


Registered Disability Savings Account (RDSP)

  • Way to save money for disabled person later in life
  • Available only to people who qualify for Federal Government Disability Tax Credit
  • Offers matched savings grant and bond for low income individuals 
  • Best for long term saving
 

How does interest work?

Interest:

  • Interest is a fee paid by a borrower to a lender for the use of their money; the borrower pays the interest, the lender earns the interest

  • The interest paid is a percentage of the money, usually based on a yearly rate

  • When we deposit money in certain types of bank accounts or investments, a bank may use the money we deposit; the bank pays us interest for the use of our money

Simple Interest:

  • The bank pays the same amount of interest every year, as a percentage of the money we deposit

Compound Interest:

  • The bank pays interest on the money we deposit, plus the interest earned; the amount of interest grows each year

  • Compound interest can help grow savings over the long term; the earlier we start saving, the more compound interest helps our money grow

Compound Interest Savings Chart:

AMOUNT SAVED PER MONTH

AMOUNT SAVED AFTER 1 YEAR

COMPOUND INTEREST RATE

TOTAL SAVED IN 10 YEARS

TOTAL INTEREST EARNED IN 10 YEARS

TOTAL SAVINGS IN 10 YEARS  (SAVINGS + INTEREST)

$10

$120

3%

$1200

$216.94

$1,416.94

$20

$240

3%

$2400

$433.87

$2,833.87

$50

$600

3%

$6000

$1084.68

$7,084.68

$100

$1200

3%

$12,000

$2,169.35

$14,169.35

$200

$2400

3%

$24,000

$4,338.71

$28,338.71

 

What are some options for saving money? (Basic)

Here are some options for saving and investing your money:

High Interest Savings Account
  • Type of deposit account
  • Bank pays you variable interest on deposits
  • Interest rate is higher than basic savings account
  • Best for short to medium-term saving

Guaranteed Investment Certificate (GIC)

  • Money is ‘locked in' for a set term
  • Term can range from 30 days to five years
  • Longer terms have higher interest rates
  • Money can be withdrawn when it "matures" at end of term
  • Plan GIC so it matures before you need the money
  • Best for medium to long-term saving

Bond

  • Loan to a government or a corporation; they pay you interest for the loan over a set term
  • When the term is over, you get your money back 
  • Government bonds in Canada are very safe
  • Corporate bonds hold some risk
  • Best for medium to long-term saving

Stock

  • Shares in a company that is publicly traded on the stock market
  • Can be very risky, may lose all of your investment
  • Greater the risk, the higher the potential profit
  • Best for short, medium, or long term investments

Mutual Fund

  • Money goes into "pooled" fund, along with other investors 
  • Fund manager put money into range of things, such as stocks and bonds
  • Different levels of risk and rates of return
  • Fees to buy reduce the amount of your return
  • Best used for long term investments

Registered Retirement Savings Plan (RRSPs)

  • Way to save for retirement and save on taxes
  • Can invest money in RRSP as you choose; savings accounts, GICs, stocks, etc.
  • Can open RRSP at bank, credit union, or investment management company
Tip: Not as useful if you are living on low income or collecting social assistance

Registered Education Savings Plans (RESPs)

  • Way to save for child's or grandchild's education after high school and save on taxes
  • Can invest money in RESP as you choose; savings accounts, GICs, stocks, etc.
  • Can open RESP at bank, credit union, life insurance company, investment company, or scholarship trust company; scholarship trust companies offer fewer investment options and may charge fees
  • Government adds money to RESP saved through:
    • Canada Education Savings Grant: Government matches contributions
    • Canada Learning Bond:  $500 bond for low-income families to open RESP; $100 each year up to $1500 until child turns 17; child must be born January 1, 2004 or later and must receive National Child Benefit Supplement
Tip: Be careful signing contracts that require monthly payments into an RESP

Tax-Free Savings Account (TFSA)

  • Way to save money without having paying tax on interest earned
  • Can invest money in TFSA as you choose; savings accounts, GICs, stocks, etc.
  • Can open a TFSA at bank if you are 18 or older, a Canadian resident, and have a Social Insurance Number
  • Limit to how much you can add to account each year; called contribution room
  • Best for medium to long term saving

Registered Disability Savings Account (RDSP)

  • Way to save money for disabled person later in life
  • Available only to people who qualify for Federal Government Disability Tax Credit
  • Best for long term saving

 

 

Taxes

Where can I find information and resources for filing taxes?

Canada Benefits Program - http://www.canadabenefits.gc.ca

  • Helps you find out what federal and provincial government benefits you may be eligible for

 

Canada Revenue Agency - http://www.cra-arc.gc.ca

 


 

How do I read a pay stub?

Your employer must provide you with a pay stub showing the following information:

 

Pay Period:

  • Date range you are being paid for
  • Usually biweekly (every two weeks), may be semi-monthly (always on the 15th and 30th of the month), or monthly

Pay Date:

  • Date that you can cash the cheque
  • Cheque is no longer valid (stale-dated) six months from that date

SIN:

  • Social Insurance Number
  • Keep private to protect yourself from identity theft- DO NOT carry your SIN card in your wallet
  • If your pay stub includes your SIN file it safely, and shred before throwing away

Pay Rate:

  • Amount you are paid per hour
  • If you are paid salary, amount paid does not vary with hours worked 

Number of Hours:

  • Number of hours worked in this pay period
  • Keep a record of your hours worked to make sure this is correct

Gross Pay:

  • Amount earned before tax deductions

Net Pay:

  • Gross Pay minus tax deductions; the amount you take home

Year to Date:

  • Running total of your earnings and deductions for the year

Deductions:

 

 

  • Federal Income Tax:

o   Amount of federal income tax deducted from earnings

o   Calculated by employer

o   Canada has ‘progressive' tax system; the more income you earn the higher percentage of income goes to taxes 

  • Provincial Income Tax:

o   Amount of provincial income tax deducted from earnings

o   Calculated by employer

o   Varies by province, lower than federal income tax

  • Canada Pension Plan (CPP):

o   Deducted if 18 years old and over

o   Employers deduct 4.95% from gross earnings over $3500 until maximum contribution reached

o   Maximum contribution increases each year

o   For current maximum contribution visit Canada Revenue Agency - http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/

  • Employment Insurance (EI):

o   Employers deduct 1.88% from gross earnings until maximum contribution reached (2016 figures)

o   For current maximum contribution visit Canada Revenue Agency - http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei

 

 

How do I file my taxes?

  • All Canadian residents must file an income tax return each year
  • If you are employed, taxes are automatically deducted from your pay:
    • If you have paid too much you get money back
    • If you have paid too little you owe money
  • The taxes you pay go towards the cost of government services

 

Where do I get income tax forms?

  • Income tax forms are available between February and May at any Canada Post or Service Canada location, or online at the Canada Revenue Agency - www.cra.gc.ca
    • Many people use software that allows them to fill out and submit their income tax return electronically

     

    How do I get help with my taxes?

    • Free community tax clinics are available for low income earners
    • If you have problems with your taxes, contact the Canada Revenue Agency
    • Tax professionals can help you file your taxes for a fee
    • You are responsible for your tax return even if someone else has prepared it for you
    • Always read your tax return before signing and never sign a blank tax return

     

    How do I get my tax refund?

    • Can get refund by direct deposit to your bank account or by cheque in the mail
    • Follow the instructions on your tax return to choose how you want to receive your refund
    • If you move, you must inform the Canada Revenue Agency to get your refund

    Warning: Some businesses advertise ‘instant refunds' to file your tax return; these are not refunds, they are loans.  May come with high fees and no guarantee that the refund amount is correct.

    What are tax deductions, credits and benefits?

    Deductions:

    • Tax deductions are things you've spent money on that you can claim to lower the amount of income tax you owe
    • They are deducted from your gross income
    • Deductions include things like child care expenses, transit passes
    • You must keep receipts for deductions

     

    Credits:

    • Tax credits are taxes you have already paid that you can claim to lower the amount of income tax you owe
    • For example, you receive a credit for the tax your employer has deducted from your pay

    When you subtract your tax credits and deductions from your gross income, you find out if you owe taxes or if you will receive a refund.

    Learn more about deductions and credits at Canada Revenue Agency - http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/menu-eng.html

     

    Benefits:

    • Tax benefits are deductions and credits created by the government to lower the amount of income tax owed by people who qualify
    • The government sends payment to those who qualify for the benefits
    • You must file a tax return in order to receive a benefit
    • Here are some of the benefits available:
      • Canada Cild Tax Benefit  (CCTB)
      • National Child Benefit Supplement (NCBS)
      • Universal Child Care Benefit (UCCB)
      • Child Disability Benefit
      • Working Income Tax Benefit
      • GST/HST Rebate
      • Canada Learning Bond (CLB)
    • There may be provincial benefits if you file a tax return, such as deductions for rent or medical expenses

    What documents do I need to file my taxes?

    Here are some documents you may need to file your income tax return:

    • Information slips from your employer (T4)

    • Information slips from the bank (T5)

    • Post secondary education information slips (T2202A)

    • Any tax-related papers you receive from the government

    • If you are self employed, keep a record of your income and all work-related expenses

    • Receipts for employment-related expenses; you can claim expenses for equipment, tools, and supplies for work if you've paid for them and your employer does not reimburse you

    • Union or professional dues 

    • Public transit monthly passes

    • Registered Retirement Savings Plan (RRSP) contribution slips

    • Child care receipts

    • Moving expenses; if you moved to be at least 40 km closer to work, or to attend college or university

    • Medical expenses; prescription medicine, dentist fees, glasses, private health insurance

    • Receipts for children's sports or arts activities

    • Receipts for income tax you paid in another country

    • Receipts for donations to Canadian charities or Canadian political parties

    There may be other slips and receipts you need to keep to support your income tax return. Ask for advice from your local Community Tax Preparation Volunteer or a tax professional.

    Consumer Tips

    How do I handle a consumer problem?

    Here are some steps to dealing with a consumer problem:

     

    Step 1: Speak to a Manager

    • If you are not happy with a product or service, ask to speak to a manager
    • Be polite and firm
    • Describe your problem and how you would like it resolved

    Step 2: Call Customer Service

    • If manager doesn't solve your problem, ask for the company's customer service phone number 
    • Write down details of your problem before you call, including:
      • Date it happened
      • Names of people you dealt with
      • What was said
    • Record name of person you speak to and details of conversation

    Step 3: Keep a File

    • Start a file where you keep all the details about the problem, including:
      • Description of your problem and actions you've taken
      • Receipts or warranties
      • Names and contact information of the people you speak to
      • Important dates
      • Details of conversations

    Step 4: Write a Letter

    • If customer service does not solve your problem, write a letter or email
    • Use copies of materials in your file as evidence to support your claim
    • Address the letter or email to a general manager, owner, or head of customer service
    • Keep a copy in your file

    Step 5: Contact a Consumer Agency

    • If the above steps don't work, contact a consumer protection agency
    • Each province has own consumer agency to protect and advise consumers

    Step 6: Legal Action

    • Legal action should be a last option; it can be time-consuming and expensive
    • May be time limits to filing lawsuits
    • Consult with a lawyer to learn about the laws in your province before taking action

    How might advertising affect me?

    These are some strategies advertisers use to try to convince you to buy services or products that you may not want or need:

    • Lifestyle Sales: Ads that lead us to believe if we buy a product or service, our whole life will improve
    • Sex Appeal: Ads that use the promise of sex or sexual attraction to sell a product or service 
    • Special Deals: Ads and "limited time offers" that urge us to buy now to get a deal, when it may not actually be a good deal
    • Star Power: Ads that use celebrities to encourage us to buy a product or service
    • Science and Statistics: Ads that use scientists, doctors or other "experts" who make false or exaggerated claims about the product or service
    • Comparisons: Ads that claim their product or service is better than a competitors with little evidence
    • Put Downs: Ads that make us feel bad about themselves to sell a product or service, for example: that we are too old, too fat,  our house is dirty, or our car is out of style
    • Weasel Words: Ads that twist the truth or use misleading language to make us believe something about a product or service that isn't true
    • Safety and Security: Ads they play on our fears and needs for safety to sell a product or service
    • Bandwagon Appeal: Ads that make us feel as though we will be left out if we don't buy the product or service

    What are some common sales tactics?

    These are strategies used by salespeople to convince you to buy something you may not want or need when you are in a store:

    • They offer one very low cost item to get you into the store, so you will then also buy other goods
    • They ask you questions about yourself and then offer a range of products they think you may buy
    • They compliment you
    • They try to convince you that you need the product
    • They ‘up sell' you and try to convince you that you will need extra features for the product you are buying
    • They throw in free items- this can seem like a good deal, but it may not actually be
    • They rush you- they tell you someone else wants to buy it, or you can only get it right now
    • They pressure you, make you feel guilty or bad for not buying

     

    What are some helpful tips for shopping?

     

    Have a Plan:

    • Make a list before you shop
    • Avoid unplanned shopping or impulse buying
    • Determine if it is a want or a need
    • Check your budget to see if you can afford it


    Compare Products:

    • Research before you buy
    • Compare to other products; look at price, quality, warranty, return policy
    • Try to find customer reviews

     

    Look at Unit Prices:

    • Calculate unit cost of item
    • Compare products by unit cost to figure out which is a better deal
    • Grocery stores are required to list unit prices on labels of many products

     

    Buy on Sale:

    • Watch for sales and discounts
    • Buy in bulk if something you use often is on sale 
    • Check store flyers for coupons, discount codes, and special offers
    • Buy off season for better prices

     

    What do I need to know about cell phones?

    Here is some basic information about cell phones and some important questions to ask yourself when choosing a cell phone plan:

    Cell Phone Basics:
    • Coverage:
      • Geographic area that cell phone will work in
      • Not all service providers cover same areas
    • Fees:
      • Basic fee for service (system access fee)
      • Fee for being able to access 911
    • What area will you be using the phone in?
    • Does the service provider cover this area?
    • How much are the fees?
    Cell Phone Plans:
    • Minutes:
      • Charge per minute cell phone used  
      • May offer flat fee for package or unlimited minutes
    • Text Messaging:
      • Charge for sending AND receiving text messages
      • May charge per text or offer flat fee for package or unlimited text messaging
    • Data:
      • Data is used when sending and receiving email or using Internet
      • Charge per MB of data
      • May offer flat fee for package or unlimited data
    • How many minutes will you use each month?
    • What time of day will you use the phone the most?
    • Do you want to use text messaging?
    • Do you want to send and receive email or browse the Internet?

     

     

    Other Features:
    • Long Distance Calling:
      • Long distance phone calls usually charged per minute
      • Long distance minutes not included in regular plans 
      • May offer flat fees for long distance calling
    • Roaming:
      • Allows you to use cell phone outside of coverage area
      • Expensive charges for cell phone use while roaming
    • Call Display:
      • Displays the number calling before you pick up
    • Voicemail:
      • Allows person calling to leave a recorded message
    • Will you make long distance calls? How often?
    • Will you use your cell phone when you travel?
    • How often will you be outside of your coverage area?
    • Will you need voicemail, call waiting, call display?

     

    What are some common scams to watch out for?

     

    Foreign Investment, Inheritance or Lottery Scams:

    • Letter or email claims to be an investment opportunity, notice you have inherited money or won the lottery
    • May claim to be wealthy prince, business person, or lawyer
    • Asks for your banking information to transfer money to your account 
    • Do not share banking or credit information
     

    Telemarketing Scams:

    • Claim that you have won a prize, sweepstakes, travel package, magazine subscription, or gym membership
    • Do not share your credit card or banking information with a telemarketer 
    • Check out the company before you agree to anything

     

    Advance Fee Scams:

    • Service or benefit is offered, but you have to pay before receiving anything
    • Common with guaranteed loans, debt consolidation, and credit repair services
    • A non-profit credit counsellor will not ask for fees in advance of providing a debt management program

     

    Debit Card Fraud: 

    • Scam to get your banking information, including:
      • Stealing your card and PIN
      • Devices to jam your card in ATMs
      •  "Skimming"; using a device to find out your banking information through the magnetic strip on your card
      • Fake ATMs that collect your card information and PIN

     

    False Charities:

    • Asks for donations for a charity
    • Does not provide information in writing
    • Does not provide charitable tax number
    • Beware: name of false charity may be similar to legitimate charity

     

    Phishing Scams:

    • Web or email based scams
    • Email received asking you to click on a link, share banking or credit information
    • May appear to be from legitimate company
    • Your bank will never ask for information through email

     

    Pyramid Schemes:

    • Claim to be a business or investment opportunity
    • Asks you to recruit more people to earn money
    • No new money generated; money from new recruits goes to those at the top of the pyramid
    • Pyramid schemes are illegal in Canada

     

    Rental Scams:

    • Online apartment listings
    • Landlord claims to be out of the country, unable to show you apartment
    • Asks for certified cheque or money transfer before mailing keys
    • Apartment often looks too good to be true; rent is much cheaper than similar apartments in the area

     

    For more information or to report a scam or fraud contact The Canadian Anti-Fraud Centre www.phonebusters.com